Final answer:
The statement is true that the deductible is an out-of-pocket amount paid by an individual before health insurance covers the remaining costs. Deductibles, along with copayments and coinsurance, are a form of cost-sharing that reduces moral hazard.
Step-by-step explanation:
True, a deductible is indeed the set amount you must pay out-of-pocket for medical expenses before your insurance company begins to pay benefits. This means, for example, if your insurance plan has a $1,000 deductible, you're responsible for paying the first $1,000 of the covered services yourself. After you pay your deductible, you usually only pay a copayment or coinsurance for covered services, and your insurance company pays the rest.
Cost-sharing mechanisms like deductibles, copayments, and coinsurance help reduce moral hazard by making sure that individuals shoulder a portion of their healthcare costs. This encourages a more conscientious use of medical services. A copayment, or 'copay', is a fixed fee you pay for a specific service or prescription. Coinsurance is a percentage of the cost of your service that you pay, even after meeting your deductible.